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>> the economy is shrinking and the economy is playing the blame game. charles: welcome, everyone, i am charles payne in for neil cavuto. the administration is saying that it was hurricane sandy and defense spending cuts and uncertainty about marcotte.

one more quarter and we are in a double dip recession with us tonight is xander -- sandra smith. >> that's right, they are trying to use this report. uncertainty when it comes to tax dollars in borrowing more money. charles: the mass media, i saw a report in new york. six reasons this wasn't a bad record. did you see that?

>> the media was trying to spin this in every way that they could. they were trying to make it look like a god for them. what we need to do is say that as a lack of economic growth policy. where is the job growth policies? right now we have consumer confidence levels that we just got this week. they are plummeting because people are seeing their paychecks shrink as a result of the expirations of payroll tax cuts. people have less money to spend, they are less optimistic about the future. the white house doesn't get it. they still think it is about the storm that happened weeks ago. charles: i have to tell you, gretchen, you mentioned this and maybe they don't care. you know, no speaking or mention of economic growth during the inauguration address.

nothing about let's be fair and divvy up the pot. this is what happens perhaps when you divvy up the pot to the gdp. >> there was no mention of the economy and government spending. here we are, we just went through the fiscal cliff crisis and we have a previous conversation with how we are going to fund the government and the debt ceiling crisis. we are looking at a long set of crisis here and trying to figure out how we will fund the government again beginning at the end of march. the sequester that supposed to go into effect. all of the administration is talking about how can we spend more money. what we saw is that it gave proof that our economy is depending too much on government spending. that our economy is living on borrowed time. also borrowed money. it feels like we have been drinking coffee in order to stay up all night. we know that is not sustainable. it is not sustainable for us to continue to borrow at this rate. we will start to see our economy contract if we don't get things

under control. we have to address the fiscal matters anyway to cut spending. otherwise it is going to be even worse. charles: you started to talk about this. it feels like the economy ultimately has a price to pay. >> home ownership levels are dropping in this country. rentals are up. people are choosing not to own a home home anymore. also we have and we'll inventory report that was twice the oil inventory that the economy forecasted. people are spending less on gasoline and they are driving around less. people are finding themselves in a completely different situation. the first month of the year than they were several months ago. this is going to be reflected in the gdp numbers. people are ulling back the

reins and they are tending their spending habits and that will have a ripple effect on the economy. the economic numbers that you can keep coming out proved that. the stock market keeps shrugging it off because they know the fed will step in and they will try to stimulate th economy as they had been. charles: how surprised are you that double dip recession has reentered the conversation? >> there were some of us who are thinking about it. the fiscal cliff, the cbo warned of it in the report. they said that this is probably going to result in an onset of a recession. something that many have been warning about for years. basically saying that we did not get this under control when it comes to government spending. but we are going to see these ramifications. we also have the ramifications in our economy and that is what

we are seeing. charles: we don't have a lot of time, but you think the market can stay disconnected from the economy much longer? >> only in the short-term. we are still at 80% unemployment at this country. millions still out of work. can't find work, pull themselves out of the workforce. without people back to work, they are not buying homes, they are not buying cards. the stock market cannot rally continuing on the low interest rate environment. we need to see real growth. charles: ladies, we thank you very much. tax hikes just kicking in. in threat of a double dip recession is looming. we have bill murray, chairman and ceo and author of without

reservations. >> the company story is what america is all about. this is a small company that became big and hired a lot of people for every 35 people in america, we create another job. lester for the first time, 1 billion people travel outside of their home country. the first time that has ever happened. only 1 million came to america. getting the act together over there and are trying to be better, but there's so much more that can be done to attract business which is one of the sure ways to start the growth of again. >> a couple of the stories set

happy chinese new year this last week. i am relatively bullish on the stock market because of the global economy. i always said there's never been a time in the history of mankind were there has been this much prosperity. it feels like the media is myopic. >> we are really growing rapidly in china. we are adding 66 more in the next few years. >> it's really interesting. charles: is that false bravado or from our part? >> well, we have to do another job. we have to get people to come here and we know they create jobs. from my standpoint, it's low hanging fruit and an easy one to

do. >> what exactly are you going for? >> well, we are doing great. we are going to add about 200 hotels next year. >> 200 hotels? >> that's right, full-service hotels. charless is that the notion that this gdp numbers and all the fumbling around, does not belie the notion that we are in trouble in this country? >> i think we are in trouble. people still travel, and their spending on travel rather than closer something else. so we are seeing continued improvement in this country.

>> if you had a chance, what would be the main thing to get them done right now if you could get something done? >> we have to grow the economy. >> it's only thing we can do to fix all this. charles: your book, without reservations come i went through some of the reviews and i found it interesting. it has to be pretty good book when you get praise for mitt romney and bill clinton. >> yes, mitt romney and i have been friends for a long time. charles: what is the book about? because of the quintessential american success story about global hospitality. is there another been there?

>> i think of it the minute you start small and you just add one hotel and it depends onthe people. you develop them and you help them grow and expand. 50% start off as our own workers. and that is the american dream and the american story. >> see you still believe in the american dream? >> absolutely. >> thank you very much. charles: coming up, a food fight for you. put down the burger and pick up a salad. we have a surprising skinny on food safety. first, washington is running a surplus. but it's bad news for you with the spark miles card from capital one, thor gets great rewards for his small business! your boa!

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michael linden are here now. ron, you say that the spending is other people's money. >> that's right, they are spending all of our money. they prayed that the country has a funnel, so all that money is falling down to them. it has become a boomtown. they are the wealthiest counties in america. the top three countries in america for wealth are right here around the district. the fact of the matter it is exactly that. many need to be creating jobs. the fact of the matter is that politicians are taking our money, our hard-earned dollars, and we are spending a record pace. we just had another tax hike. >> i just don't see it in the numbers. federal spending is actually down over the last three years.

the number of federal employees are down over the last three years. in that time, the budget has gone from the rest of the black and it's not about the federal government. funneling money into the district. it's about this district rates of taxes. it also cut spending and a lot of people are moving into the district. that doesn't seem to be dissuading anybody. it's not really a story of the federal government. charles: you may not see it in the numbers, but the last time i was in washington dc, i thought outside in the street. it looked like a mini dubai. something is attracting people and it has to be this growing government. >> that's right. people are moving to washington dc for jobs and it may not be a federal government job, but when the economy is booming, that is when people are moving. you are walking around a more elite neighborhood. i can tell you that just like the rest of our country there is

a growing elite and many of them are federal government workers and there also is a 25% poverty rate. this is the result over the last few decades that are punishing people and taking on opportunities. >> i do find places that raised taxes and complain about income inequality have the biggest income inequality in the country. i want to get back to you on this. we have another four years. the president was unabashed in his role for a gigantic unit of government. charles: if you have an opinion based on a certain set of numbers, you have to come up

with. >> are not talking about big government in dc. it is unacceptable. the fact of the matter is that even good federal workers, how about you held build decent roa? charles: wrong, we have less than a minute. go ahead. >> we should spend some of that money. there is a surplus. building roads, i am for that.

government investment does create jobs. we see an example of that. >> the bottom line is that this money did come from the pockets of americans around this country who are struggling. you know, at some point, there is something wrong with that picture. >> the rest of the company is responding to a marketplace. >> we know it doesn't respond to market in the same way. it actually an incentive for to grow. b1 guys, we appreciate it. see you soon. okay, blackberry is getting crushed today. they are saying that buying blackberry is like buying a hewlett-pack

charles: it's the tale of two technology companies. one looks like it's on the comeback and the other not so much. facebook link in nearly $1.6 billion of revenue. slightly higher than analyst expectations. new software and new phones. what it will take for the company to survive. bob, i don't know, wall street in like this either. >> it's a sad tale. if you go back 2004, this company was getting a great

start, but stock prices were $13 per share, early 2008, it was $130 per share. today it is around $13 per share and falling fast. the core problem is that what they just announced it should have been announced in 2007 or early 2008. they have completely missed a technology inflection point, mainly touchscreens and the like. so it's a sad tale. >> by bob's not they are about six years behind. is it too little too late? >> well, when you look at that, when you look at the ceo comments out of the mel brooks western comedy where you have this coming in on the horse. this from a social perspective versus the analysis, they are

absolutely out of touch. even though they have the product adheres too late, they have described it as exciting and it's not exciting. so the real hope right now, i am not one of them. there are people who are bottom fishing and people that still have a blackberry, they are going to replace it with another blackberry or at least halfway. the problem is when you look at that cash flow going into two or three or four years from now, i don't see what we have. i think that we have a cpa who is a normal guy, he loves his blackberry. i promise is going to get an iphone. >> this is a cautionary tale about management. herman when he used to brag about ceos. this might show that you can have two ceos in this world. >> that's right, they waited too long to take some action.

secondly, the brand is old and tarnished. buying a blackberry is like buying a buick. typically the drivers of a buick are about 60 years old. no offense to buick drivers. but the fact is that that is the reality of the brand. the blackberry brand is sick at this point to okay, what would facebook be? >> i think that frankly it is still on the production line. one of these days it's going to come off the production lne. and i say that because this is a company that generated 40% and revenue. but the costs are up 67% it runs

in front of 160. it's not a natural setting for advertising. the google search engine is a very natural setting for a search engine. you start looking at things about cars because you think you're buying a car. charles: we see amazon is rewarded handsomely for having great potential. can facebook start to convince this and we need to learn how to monetize them.

>> now we are seeing is analyzed and 20% of the mobile apps. and then we see 20 or 30% come in and we have the number of 12 years ago. i'm too old for that. they need 40% year-over-year. think of apple because they didn't have infrastructure in the money for a reason. facebook would be successful. i hope the people they govern from the ipo could -- i don't know, it's not an amazon. pat: charles: you guys are so fantastic. thank you all for joining us. take care. >> thank you, charles. >> thank you, charles. charles: the bailout that

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would he make of this? >> well, in its original structure, i was never set up to be on a commercially normal basis. the coupon is something like twice with the govement is paying and he had 100% equity convertibility. so it was fated not to be structured in a way that you could make a profit. >> what was the structure than? >> as for the control function, i'm not so sure that under the bush administration there is much interest in the control.

>> i think that they both have their own ulterior reasons. but they both were able to mold it into their own vision, if you will. but i think the overarching theme is that these bailouts, they try to convince america that they were. but we don't necessarily need the government involved in all this stuff. we have guys like you that have opportunities all the time. and you go after industries the people talk about. he continues to happen and it could have been more if the government gets out of the way. >> we have done it with a number of things. we have brought them from the fdic down in florida. eighteen months later, it was the largest ipo in history of america. it was very successful. commercially reasonable deal can

be made to work. [inaudible] >> it's very hard to make that work because some don't make enough with the ones that are out to make a recoup of the loss. >> the argument is that there are some industries that only government has enough money working pinup enough money to be the savior. but again, i have seen you and others that require a whole lot of money and he made it work. >> well, i can't imagine that we could have gotten billions of dollars together. i think there is a question of when there is an emergency.

>> but he really had to do it over a weekend, that money could be assembled over weekend. >> although fanning the flames of fear makes it that much more urgent. commercial money raising and an amazing opportunity, and you are now focused on maritime transport. >> that's right, america is blessed with having huge reserves that can be exported by the federal government. so far they hav only granted one license and that was part of the river project. something like 16 others that

have been pending for a couple of years. the best way to overcome the negative is domestic product figures that were just released would be to encourage the exploitation of domestic and international purposes. >> i have to tell you both natural gas and oil, the liquid natural gas story is such a godsend and american miracle that it's amazing. i am shocked that the government -- even administration can go forward with it and maybe just try to regulate it so that they can apply it like windmills and solar panels and things like that. >> we worry that shell gas would drive the price of electricity down and make sun and wind power even more economical.

to the degree that we power something that is available, that would be part of it. >> america look could make a lot of money, we would keep a trillion dollars, create a lot of jobs and, like i said, you are in the right place at the right time. i appreciate it. charles: a prisoner facing 73 years behind bars and a gender identity disorder.

charles: a virginia inmate might get a sex change operation and do it on a taxpayer dime. this individual suffers from a gender identity disorder and is

asking his prison to pick up the tab. the state could end up paying for it all. >> the issue is whether or not not getting the sex change violates the eighth amendment right. this is an actual mental health disorder. gender identity disorder. it is recognized as a psychiatric association and one of the problems when it is an extreme case can be self-mutilation. in this situation, the enemy has tried to castrate herself. and that's been in the hospital and almost bled to death. it's a very touchy-feely kind of

situation. but i think that the state f virginia is on the hook because it's a medically necessary procedure. and it can result in severe harm to her. and she doesn't have it. so it's just useful as it may be, i think they have to do it. >> you know, even people who match the sympathy for the inmate may actually say someone is serving time for committing a serious crime. >> the thought that my tax dollars to go to a sex change operation for an inmate who is serving 70 some years in jail for bank robbery is absurd. how far do we want to take this?

if someone has a deviated septum and is having problems breathing? are we going to provide inmates with nose jobs as well? this doesn't seem like a good use of taxpayer dollars and i don't think it's going to go anywhere, even though the appellate court said it is sent back down. charles: this wouldn't be the first time. there has been a case recently where they actually did rule in favor r of the inmate, correct? >> yes, that is true. i think that it's a strange situation. a strange set of facts. honestly it's not a medical condition, per se, it's not a dental technician, per se, those are easily identifiable. mental health is a soft science. i think it easy to understand that if someone was having heart problems and they need a transplant, or if they have a kidney problem and they need a kidney transplant, would it be cruel and unusual punishment to let the person just linger

without the necessary surgery? let them die? give them an aspirin for their pain? yes, obviously. but when they are looking at a mental health condition, all bets are off. people don't even think it's valid. but it is valid be one kimberly, obviously we are talking about opening serious floodgates. >> absolutely. has anyone questioned why this individual never had a reassignment surgery prior to being incarcerated? probably because she couldn't afford it. so she goes and commits this robbery, she goes to jail and the taxpayers should foot the bill? this is a point where she goes to die if she has the surgery, this is a purely elective surgery that the american taxpayer should not have to pay for. >> that's what we have to talk about here. opening the floodgates, no matter how much compassion you feel for this, this could be an extraordinarily interesting case and people still couldn't understand what all the other

problems why this would be okay okay, you have the eighth amendment rights. that is part of our constitution and part of our constitution, including the eighth amendment says medical needs. they have to be dealt with. charles: okay, it's open to interpretation. i was going to tell you guys about this, have a good afternoon. okay, don't be afraid of animal animals. >> would you please not be my pants? [laughter] charles: that's right, i feel a food fight and ready to breakout. the capital one cash rewards card gives you 1% cash back on all purchases,

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charles: a new study from the cdc says that there is contaminated produce that is producing a lot of illness. that is compared to 2.1 million cases caused by contaminated meat products. 4.4 million is caused by coders. >> i ran right over here and this is great news. i've always known that. >> you have always known as? >> yes, absolutely.

i have designed a restaurant based on this. >> okay, doctor, listen. i recently read about the obesity and obese people actually live longer than these people. is your industry being turned around? everything you guys believe in? >> absolutely not. i can't stand when studies like this come out. this is a unhealthy for our country. >> if you look at the numbers and you take them at face value, you could say that there are at least 2 million people who didn't have produced who kind of wish they didn't. >> well, that may be true. the one you're looking at illnesses that they get, they are very mild and self-limited

like diarrhea and a little bit of vomiting for a couple of days. when you look at the diseases that they can prevent like diabetes i think i would much rather run the risk of the little upset stomach if it meant decreasing heart disease and diabetes. this is absolutely not a reason. you should not be eating more bacon cheeseburgers as a result. it may be safer than we think, but not from an overall health standpoint. charles: i have to tell you that you look really good, scott. you eat this stuff all the time? >> i have a well-balanced diet. very well balanced and nothing complements this like a nice big bacon cheeseburger. >> do you think that the police have gone overboard and that this is all part of a bigger agenda of the nanny state and not necessarily anything to do with health?

>> well, just like our other guest said, there's no reason to stop eating vegetables. it's about a well-balanced diet. you need to add protein and leafy greens. myself included. asparagus or whatever, it's all about variety and having a well-balanced diet. >> we know that part. but wht about the idea that perhaps meat is safer than we have been told? >> i cannot argue with that. i've eaten meat my whole life and never gotten sick from me. >> i'm saying that that's not research. we are really not talking about major health. scott may be a healthy person, it sounds like he has a balanced diet and i agree with that. but the majority of us haven't gotten sick and foodborne illnesses. so that's not really the issue, meat versus vegetables. it's about infection and yes, there is a little bit higher risk from vegetables, but that means that we need to look at

our farming practices and our kitchen practices and we can focus on that and not drop the salad for a double bacon cheeseburger. >> okay, go ahead. >> the greatest thing about bacon is that it's cured. it's almost impossible. i think the last case of trichinosis was about a hundred years ago. [laughter] >> eat more bacon and fry it well. the doctor, what about the notion that we have been programmed. there has been a multi-decade in recent times that sort of scare us. certainly don't go to scott's house. too much beef and bacon. do you think that has gone overboard? >> i do not think that has gone overboard. i think some of the newer researches have shown that any

kind of cured meat have risk of gastrointestinal cancer. in moderation i am okay, but certainly not on a regular basis. not in place of leafy greens. the thing is that it's a constantly evolving field. experts like myself are just trying to do the best at we can with the available data. we are softening a little bit on red meat, but not cured meat or processed lunch meat and not bacon. >> we are going to have to leave it there. you are both very attractive people. >> thank you guys so much. we will see you soon. remapped. charles: well, the economy is charles: well, the economy is shrinking and people are

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♪ many hot dogs are within you. try pepto-bismol to-go, it's the power of pepto, but it fits in your pocket. now tell the world daniel... of pepto-bismol to-go. charles: the economy isn't just blowing, it is shrinking. democrats are pushing for even more tax hikes.

my next guest says this is the last thing that we need. >> i think intuitively americans understand that we don't need tax increases, but we really need economic growth. because then you decrease unemploymentnd you have a lot of our nations problems to solve and we get more revenue. so you can get two birds with one stone their. charles: everyone sort of agrees that hiking taxes and recessionary environment was a bad thing to do. now it feels like maybe that doesn't matter to some people anymore. >> i still think that we need to be careful. if you look at the gdp numbers, you see that consumer expenditures were up in business investment was up and those are good numbers. the thing that was dragging down the growth was government spending was way down. in defense, it was a huge decrease in government spending, which is why we have a slightly negative growth.

so we should not be slashing government spending right now just as the economy is coming out of the recession. this number is absolute proof of that. the tax increases don't seem to have been in place in the fourth quarter of 2012. so i don't know why we are talking about. >> government spending was down, but nondefense government spending was actually up. certainly raising taxes, i don't see how it would have become better. >> if you look at government spending, government spending was about $900 billion in the fourth quarter higher than the second quarter in government spending went out. defense spending went down, but it grew. it was actually higher than

before it. [talking over each other] [talking over each other] charles: wrong, would you say? >> defense spending is government spending. government spending is down. >> i don't know what to tell you, $900 billion, this quarter, last quarter, it was $840 billion. we actually increased in spending. >> if you look at it, this economy is going down the tubes. [talking over each other] [talking over each other] charles: the issue is really taxes.

yesterday we saw a consumer confidence report that was significantly below expectations and the key reason was that people saw their paychecks and they were promised no middle-class tax hikes and that's exactly what they get when the payroll tax came back. now they are not sure. it seems like a very good thing. >> it is a dangerous thing. >> we shouldn't think about this if they can't manage the money efficiently. the psychological effect of getting the first paycheck and realizing that i don't know how i will make ends meet or not. it is antagonistic towards business since the beginning. it's going to be huge problem.